UN summit: What does it mean for tackling world poverty?

Chair of the OECD Development Assistance Committee (DAC)

In September world leaders made the journey to the UN headquarters in New York. Statements were made; a much-contested declaration was painfully agreed. People get cynical about international summits. What should those concerned with ending global poverty make of this one?

For me, there are encouraging signs. True, the summit brought only a few new decisions on development, but it nonetheless set the seal of all world leaders on a commitment to eradicate poverty for reasons of both common humanity and common interest. Building on the Millennium Summit in 2000, and the Monterrey and Johannesburg conferences of 2002, it added in a series of high-level commitments made in the months leading up to the summit on increasing aid, making aid more effective and on debt relief. All countries affirmed their commitment to the Millennium Development Goals.

The UN summit reaffirmed several principles, including the message that the poor countries themselves must take primary responsibility for their own development. This means getting away from a dependency mentality on the side of poor countries, and a paternalist one on the side of the donors. Members also rightly stressed the need to give poor countries a better environment in which to earn their living. A real advance in the Doha round of trade negotiations remains a key test of this.

Concretely, the summit agreed that by next year countries should put in place plans consistent with reaching internationally-agreed objectives, and specifically the Millennium Development Goals. These Goals are a first attempt to subject the development process to the discipline of showing that it can improve people’s lives on a large scale within an agreed time frame. See pages 24 and 25.

This requires making progress not just at global level–as should be the case for the poverty goal, thanks to growth in Asia–but in individual countries, an altogether more challenging task. Scaled-up and more effective aid clearly has a role to play in support of countries’ own efforts. China’s commitment to a $10 billion programme is significant, but otherwise, new announcements on future aid levels were few. This was no surprise, since most donors had made announcements already. In fact, OECD experts estimate that, when all the year’s commitments are added up, headline aid from OECD countries alone could rise by $50 billion between 2004 and 2010, to nearly $130 billion. The UN Summit Outcome statement cites this estimate, which, if achieved, would be the largest increase in aid since the OECD Development Assistance Committee was founded in 1960. Proposals for so-called innovative financing have also progressed. Already, five European donors have established an International Financing Facility for Immunisation, and Chile has introduced an airline ticket levy for development, to be followed shortly by some EU members.

By historical standards these developments are remarkable. But will the commitments deliver needed support to a country developing a more ambitious strategy to reach the Goals? There are three reasons to hesitate.

First, donors may not deliver what they promised. It will be tough to get legislatures to vote, year after year, rapid increases in foreign aid. Second, if they do deliver, that aid may come in forms that do not help the hypothetical recipient. Funds may go, as they certainly will this year, to major emergencies, like the Asian tsunami, or to write off unserviced export credit debt, as in Iraq. The third reason for caution is that donors may be unwilling to offer sufficiently firm medium-term commitments at country level to convince governments or the IMF that it is safe to plan more ambitiously.

These issues will put donors under pressure to be more transparent. OECD now routinely provides updates on its website; currently, it shows estimates of what our members’ statements imply for spending in 2006 and 2010 (see Databank and references). This needs to be complemented by better forward-looking information on the composition and direction of aid spending.

Ultimately, of course, aid has to work effectively. The summit rightly welcomed the “Paris Declaration”, issued by a high-level forum last March where aid recipients and donors agreed to several steps, such as promoting genuine ownership by the recipient, aligning aid to local priorities and using local delivery systems which meet appropriate standards, harmonising donor practices to cut waste, a stronger focus on results, and monitoring progress jointly. The Declaration includes targets which, for the first time, will measure the effectiveness of donors’ aid delivery. The UN also received from the summit a mandate for the Economic and Social Council to review progress in development co-operation every two years.

It is easy to expect too much from summits. But this latest UN summit means that all parties engaged in development will be more strongly held to account, both at country level and internationally. We will perhaps look back on 2005 as the year when a joint enterprise to deal with global poverty became a political reality. Those journeys to New York may have been worth it after all.

The Millennium Development Goals in a nutshell

©OECD Observer No 251, September 2005

Economic data

GDP growth: -1.8% Q1 2020/Q4 2019
Consumer price inflation: 0.9% Apr 2020 annual
Trade (G20): -4.3% exp, -3.9% imp, Q1 2020/Q4 2019
Unemployment: 8.4% Apr 2020
Last update: 9 July 2020

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